Port of Tacoma -- Thumbnail History, Part 3

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In the 90 years since it was established by the citizens of Pierce County as a publicly owned port, the Port of Tacoma has become a major player in world trade. It serves as a gateway port between Asian producers and consumer markets across the United States and as an export outlet for products from the Northwest and around the country. A suite of factors that the Port calls the "Tacoma Advantage" have contributed to its success. The advantages begin with the port's location on the Tacoma tideflats along the deep waters of Commencement Bay: the port's waterways are 51 feet deep at low water and the tideflats continue to provide ample room for development. The Port's acreage has allowed it to create efficient intermodal transportation connections between ship and road or rail, often right on the dock. Cooperation between Port management and union longshore workers has provided an additional advantage, helping bring many of the world's largest container lines to Tacoma. Part 3 of this three-part Thumbnail History of the Port traces its development from 1981, when a pioneering dockside railyard fueled its rapid rise in port rankings, through the present.

Intermodal Yards

The Port of Tacoma helped pioneer a new phase in trade and transportation history in 1981 when it opened its North Intermodal Yard, the first dockside railyard on the West Coast. Intermodal yards bring two or more modes of transportation together in one location, allowing containers -- the 20-foot-long boxes that revolutionized cargo handling -- to be transferred from one mode to another. Plans for intermodal connections between ships, railroads, and trucks had been proposed as long ago as the 1960s when Roy Perry headed the Port. Those plans came to fruition with the North Intermodal Yard, located on the main port peninsula between the docks of Terminal 7 on Sitcum Waterway and Terminal 4 on Blair Waterway.

In 1982, Mitsubishi joined the ranks of automobile manufacturers shipping vehicles through the Port of Tacoma as it entered the United States market for the 1983 model year. Also in 1982, the Port opened its new administrative office building at the head of Sitcum Waterway and applied to the federal Department of Commerce for approval of a Foreign Trade Zone (FTZ) at the port. An FTZ is deemed to be outside the United States for Customs purposes, providing financial advantages for importers and exporters and for manufacturing activity conducted in the FTZ. Shippers do not have to pay import duties and taxes until goods leave the FTZ for the U.S. market, and do not pay at all if the goods are re-exported outside the U.S. Manufacturers who assemble or process goods in the FTZ pay duties only on the imported components.

The Commerce Department approved the Port's Foreign Trade Zone designation in 1983 and FTZ No. 86 commenced operation two years later when Mazda began using 55 acres of the site to add U.S.-made accessories to imported vehicles. By the end of the decade, the FTZ had expanded to more than 800 acres and was the most active in the country based on the dollar amount of goods processed.

The success of the Port's pioneering dockside intermodal connection in expediting cargo transfer led to expansions and upgrades of the North Intermodal Yard throughout the 1980s. In addition, the Port soon opened the South Intermodal Yard, immediately across E 11th Street from Sitcum Waterway. The new intermodal connections helped fuel the Port of Tacoma's rapid growth during the 1980s. Located in the Northwest where travel time from exporting countries is less than to rival ports in California, Tacoma particularly benefited from expanding Asian trade. Because Northwest cities are also less congested and offer smaller local markets, most Asian imports are immediately shipped onward by rail to the Midwest and the East Coast. Tacoma's large waterfront industrial area allowed it to build and operate multiple intermodal yards with easy access to interstate highways as well as long-distance rail lines, providing an advantage over other Northwest ports. In subsequent decades, the Port would construct additional state-of-the-art dockside intermodal yards in conjunction with two new terminal projects, Washington United Terminals and Pierce County Terminal.

New Arrivals

When Sea-Land, the giant container line that had been Seattle's largest shipping tenant, announced that it would move its operations to Tacoma, the company cited the savings in cargo-moving costs made possible by Tacoma's first dockside railyard, along with the productivity of its longshore workforce, as the reasons for its decision. After Sea-Land signed a 30-year lease in 1983, the Port designed and built the $44 million Sea-Land Terminal on Sitcum Waterway. The project included constructing a new terminal on the east side of Blair Waterway for TOTE's Alaska service in order to make room for the Sea-Land container terminal at TOTE's previous location.

While the Sea-Land terminal was under construction, in 1984 Lawrence Killeen succeeded Richard Smith as the Port's executive director. Like Sea-Land, Killeen moved from the Port of Seattle, where he had been facilities director. During Killeen's five-year tenure, three major container shipping lines began calling at the Port of Tacoma, dramatically boosting its ranking among U.S. and world ports.

Within weeks after Sea-Land's first ship docked at its new terminal in 1985, another large container shipping company, the Danish line Maersk, followed Sea-Land to the Port of Tacoma. In 1988, K Line, from Japan, became the third large container line in three years to begin serving Tacoma. K Line moved from Seattle as Sea-Land had. The additional container ships brought further growth to the port's intermodal yards. In 1987, the old United Grain Terminal, one of the Port's earliest projects (which had closed in 1985, 10 years after the larger Continental Grain facility opened), was demolished to allow expansion of the North Intermodal Yard to handle the increase in container traffic K Line would bring. Also in 1987, both Sea-Land and Maersk named new container ships for Tacoma. (In 1999, Maersk bought Sea-Land's international shipping business, creating Maersk Sealand, the world's largest container shipping operation, which continues to play a major role in Port of Tacoma shipping.)

The arrival of Sea-Land and Maersk in 1985 made Tacoma the fastest growing port in North America. By 1986, the port had climbed from 20th to 6th in the United States in the number of containers transported. Among ports worldwide, its ranking rose from the 60s to the low 20s. After presiding over five years of expansion, Killeen stepped down in 1989 and was replaced as executive director by John Terpstra, the Port's senior director of facilities.

The Port and the Tribe

Even as the Port of Tacoma grew during the 1980s, it was involved in complex and difficult negotiations and litigation with the Puyallup Tribe over ownership of the prime waterfront real estate where its facilities are located. Much of the port, part of downtown Tacoma, all of Fife, and a stretch of Interstate 5 were all included not just within the Puyallups' historic lands, but within the 18,000-acre reservation established for the tribe in 1857. In 1984, the tribe won a $77 million judgment for 12 acres used by the Port since 1950, and it went on to claim the entire former reservation. Tribal members rejected proposed settlements in 1985 and 1987 before agreeing to accept $162 million (the second largest indigenous land settlement in U.S. history) in 1988. A 1989 federal law approving the settlement and formal tribal acceptance in 1990 removed the cloud hanging over Port property, paving the way for further development and beginning an era of cooperation between the Port and the Puyallup Tribe on both development and environmental issues.

The Port continued to grow as the 1990s opened. In 1991, another major container shipper, Taiwan's Evergreen Line, began serving the Port's Terminal 4. The new arrival helped the port reach the one-million container mark that year for the first time in its history. But even while trade was increasing, large-scale manufacturers were starting to disappear from the Tacoma tideflats. In 1992, Tacoma Boat, one of the area's larger employers, closed for good after years of struggling with bankruptcy.

The Puyallup settlement opened the way for the Port to develop the upper Blair Waterway, but another obstacle remained. The Blair Bridge, which carried E 11th Street over the waterway, had a drawbridge opening of 150 feet, more than adequate when the bridge was built in the 1950s, but too small for the giant container ships of the late twentieth century. Some of the Puyallup settlement money was ear-marked to rebuild the bridge or construct a bypass, in return for which the Puyallups gained access to the waterway and title to large tracts of property on its east side, where in 1996 the tribe constructed the Emerald Queen Casino. In 1997, after years of negotiation and planning, a replacement route -- State Route 509 looping south of Blair Waterway and reaching downtown Tacoma via an innovative cable-stayed bridge over the Thea Foss Waterway -- was opened, allowing the Blair Bridge to be removed and unlocking the upper Blair Waterway for development.

Transition and Progress

By then, the port commission, concerned the Port was losing volume to California rivals and that its reputation for innovation was slipping, had removed John Terpstra, though commissioners praised his work building terminals and on the Puyallup settlement. In April 1997, acting director Don Meyer completed negotiations that Terpstra had begun a year earlier with Hyundai Merchant Marine for the Korean line to move its container operations from Seattle to Tacoma. Hyundai entered a 30-year lease for the first container terminal to be built on the upper Blair Waterway following the removal of the bridge. Opened in 1999 and named Washington United Terminals (WUT), the facility included the Hyundai Intermodal Yard providing dockside rail connections. WUT was expanded in 2001 and 2007 to reach its present size of 102 acres.

In September 1997, Andrea Riniker took over as the Port's executive director. Riniker, like Killeen before her, came from the Port of Seattle, where she had been deputy director and had previously been managing director of Sea-Tac Airport. Earlier in her career she had headed the state's Department of Ecology. Riniker was the Port's eighth director and the first (and so far only) woman to serve in the position. Her seven-year tenure proved to be another era of growth for the Port of Tacoma, which surpassed Seattle in cargo volume to become the fifth largest port in North America. Container volumes set records in four of the seven years, increasing by 62 percent overall. Under Riniker, the Port invested heavily in the continued development of the upper Blair Waterway.

The Tacoma tideflats' transition away from large manufacturing continued as the Kaiser Aluminum smelter, which had at its peak employed hundreds of workers, closed in 2000 due to increasing power costs and the effects of a long strike. Although the loss of jobs hurt the local economy at the time, the 96-acre Kaiser property, strategically located near the upper end of Blair Waterway on the peninsula between the Blair and Hylebos waterways, soon became a key part of the Port's future development plans. In 2002, the Port contracted to buy the former smelter site from Kaiser.

In 2001, the Port celebrated the arrival of its 20th container crane, completed the first expansion of Washington United Terminals, and began a 600-foot extension of the pier serving Maersk Sealand. The attacks that occurred on September 11 had lasting effects on the Port as on the rest of the world. Beginning in 2002, the Port of Tacoma, along with other ports in Puget Sound and around the country, received federal grants to test and upgrade security at the ports and to improve "supply chain security" from the point of origin abroad to the final U.S. destination. By the end of 2003, the Port complied with new security measures by adopting and winning Coast Guard approval for a Facility Security Plan. Federal funding continued to help pay for the increased security expenses.

In late September 2002, for the first time since the 1971 longshore workers strike, a labor-management dispute closed all West Coast ports, including Tacoma, for 11 days. This time the work stoppage was not a strike by workers but a lockout by employers, represented by the Pacific Maritime Association (PMA). The PMA blamed the lockout on a slowdown by the workers, but the International Longshoremen's and Warehousemen's Union (ILWU) called it a negotiating ploy by management. Like President Richard M. Nixon (1913-1994) in 1971, George W. Bush (b. 1946) used his authority under the Taft-Hartley Act to order dock work to resume. With the help of federal mediators, the PMA and ILWU agreed on a new six-year contract in November 2002. The PMA won the right to introduce more new labor-saving technology, but the contract guaranteed no workers would lose their jobs as a result and represented one of the largest benefit increases in union history.

New Facilities

The Port's plans for expansion on upper Blair Waterway received a major boost in 2003, when Evergreen Line agreed to lease a new container terminal to be built at the head of the waterway, replacing the old Pierce County Terminal that had handled bulk cargo. Until the Evergreen deal, some container shippers had doubts about the accessibility of the two-mile-long waterway, but with Evergreen in place others soon expressed interest. The new 171-acre, $210 million Pierce County Terminal and Intermodal Yard, which the Port built for Evergreen over the next two years, was the largest construction project in Port history.

In October 2003, the Port opened the $40 million, 146.5-acre Marshall Avenue Auto Facility. Operated by Auto Warehousing Company, the new facility could store and process nearly 20,000 vehicles at a time. Two months later, the one-millionth Mazda imported through the port (a Velocity Red 2004 RX-8), drove off a transport ship at Blair Terminal and made its way to the Marshall Avenue Facility. By 2004, a dedicated bridge over Port of Tacoma Road made the short trip from transport ship to Auto Facility even faster. Andrea Riniker retired in 2004 after overseeing seven years of growth. The port commission chose Deputy Executive Director Timothy Farrell to replace Riniker.

In Farrell's first full year on the job, 2005, the Port opened major new facilities and demolished some historic old ones. In January, Evergreen Line moved to the newly opened Pierce County Terminal. As soon as Evergreen vacated its former location at Terminal 4, the Port began work on the redevelopment and expansion of Husky Terminal on the site. Opened in July, the new Husky Terminal doubled the presence of K Lines at Tacoma. Finally, in October, the Port completed the Olympic Container Terminal, an expansion of K Lines' prior home at Terminal 7, for Yang Ming Line, which became the latest shipper to do business at the port. The construction of Olympic Container Terminal required demolition of the two alumina domes that had served the now-closed Kaiser Smelter and the dismantling of the Port's historic first container crane "Big Red" and a neighboring bucket crane that had unloaded alumina from ships.

Although some historic structures disappeared, historic ships returned to Tacoma in 2005, at least for the crowd-packed six days of the Tacoma Tall Ships Festival that brought 29 tall ships to Commencement Bay in June and July. The Port of Tacoma was a major sponsor of the 2005 Tall Ships Festival and many people connected with the port, from Commissioner Clare Petrich who chaired the event to ILWU Local 23 longshore workers who volunteered to help dock the ships, contributed to its success. (Tacoma hosted the Tall Ships again in 2008.)

Continuing to Expand

Opening the three new terminals, along with the rapid increase in imports from Asia, especially China, made 2005 another record-setting year for the Port. Volume jumped by 20 percent and the Port handled more than two million containers in a year for the first time. An economic impact study indicated that 43,000 jobs in Pierce County and a total of 113,000 in the state were tied to Port of Tacoma activity. Growth at the port leveled off over the next two years. In 2006 container volume set a new record but the increase from 2005 was slight. In 2007 container volume dropped to slightly under two million.

Despite slowing growth, the Port continued to plan for expansion. From 2005 to 2007, it bought more than 1,000 acres, most near the Blair Waterway, to create more terminals and more jobs along the waterway's east side. As with past expansion, the new plans will bring change, since some of the land on the Blair-Hylebos peninsula that will become container terminals is now occupied by small manufacturers that will have to relocate. Manufacturers are not the only facilities being supplanted to make room for new container terminals: the Port arranged to end Weyerhaeuser's lease for the wood chip facility, which opened in 1972, 11 years ahead of schedule to make more room on Blair Waterway for terminal development.

By 2007, plans were in place for the first container terminals on the east side of Blair Waterway. NYK Line of Japan signed a lease for a terminal that the Port expects to complete in 2012. And the Puyallup Tribe (which had relocated its Emerald Queen Casino away from the waterfront in 2004), announced a partnership with SSA Marine of Seattle to build a privately operated container terminal on tribal and SSA land along the Blair Waterway. The Port finished the earliest construction work for its project in February 2008, completing pile-driving for a $46 million wharf on the former Kaiser Aluminum property following demolition and clearing of the property in 2006 and 2007.

Ninety years after its creation by the voters of Pierce County, the Port of Tacoma continues to transform the landscape of Commencement Bay and the economy of the region and to play an increasingly significant role in both international and domestic trade.

To return to Parts 1 and 2, click "Browse to Previous Essay" below.

This essay made possible by:

Port of Tacoma

Containers being unloaded from a "K" Line ship, George Washington Bridge (owned by Kawasaki Kisen Kaisha, Ltd.), Port of Tacoma

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